Which of the following statements is true?
A) If marginal costs are constant, then it is optimal to advertise until the last dollar spent on advertising generates one additional dollar of sales.
B) If the demand curve shifts leftward as the advertising expenditure increases, then the advertising elasticity of demand is positive.
C) If the advertising elasticity of demand declines and consumer demand becomes more price elastic, then the optimal advertising-to-sales ratio declines.
D) If the advertising elasticity of demand is positive, then the demand curve must be upward sloping.
C
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If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of
A) -3 percent. B) 8 percent. C) 2 percent. D) 4 percent. E) 0.5 percent.
In the Keynesian model, suppose the Fed wants to keep output unchanged. If the IS curve shifts to the left, and the Fed acts to keep output unchanged, then
A) taxes will increase. B) the money supply will decline. C) the real interest rate will decrease. D) taxes will decrease.
___________ is the ability to recognize and use resources effectively
a. Efficiency b. Intuition c. Helpfulness d. Resourcefulness
Consider a monopoly where the inverse demand for its product is given by P = 80 ? 2Q. Total costs for this monopolist are estimated to be C(Q) = 100 + 20Q + Q2. At the profit-maximizing combination of output and price, deadweight loss is:
A. $50. B. $80. C. $30. D. Cannot be determined with the given information.